ECB’s Digital Currency Decision Crucial for Israel’s Digital Shekel Initiative
The Bank of Israel (BOI) is actively exploring the development of a central bank digital currency (CBDC), known as the digital shekel, aimed at modernizing Israel’s payment infrastructure and fostering innovation.
BOI Deputy Governor Andrew Abir has indicated that the bank awaits a significant move from a major central bank, likely the European Central Bank (ECB), before advancing with its own digital currency initiative. This cautious stance aligns with a global trend, as 134 countries, representing 98% of the global economy, are also investigating digital currencies. Since 2020, BOI has ramped up efforts, including launching the “Digital Shekel Challenge,” yet uncertainties persist regarding regulatory approvals from finance and justice ministries, as well as concerns over public adoption.
Despite challenges, a digital shekel holds potential to transform payment systems by competing with traditional bank deposits and fostering a more competitive landscape among payment providers in Israel’s concentrated banking sector.
Clever Robot News Desk 12nd July 2024
